Exhibit
10.4


 


SUBSCRIPTION
AND PREFERRED STOCK PURCHASE AGREEMENT


 


This
Subscription and Preferred Stock Purchase Agreement (this “Agreement”),
dated as of November 24, 2009, is by and between Cubic Energy, Inc.
(the “Company”), a Texas corporation, and Langtry Mineral &
Development, LLC, a Texas  limited
liability company (“Langtry”).


 


1.                                      Subscription.  Subject to the terms and conditions hereof,
Langtry hereby irrevocably subscribes for and agrees to purchase from the
Company 103,500 shares (the “Shares”) of Series A Convertible
Preferred Stock, par value $0.01 per share (the “Preferred Stock”), at a
purchase price of $100.00 per Share (the “Subscription Price”), and the
Company agrees to sell such Shares to Langtry at the Subscription Price.  The Preferred Stock is convertible into
shares (the “Conversion Shares”) of Common Stock, par value $0.05 per
share (the “Common Stock”), as provided in that Certificate of
Designation Establishing Series of Preferred Stock, which sets forth the
rights and preferences of the Preferred Stock (the “Certificate of
Designation”).  The Conversion Shares
and the Shares are referred to collectively herein as the “Securities.”


 


2.                                      Delivery of
Subscription Price; Delivery of Certificates Representing Shares.  Langtry understands and agrees that this
subscription is made subject to the following terms and conditions:


 


(a)                                 Contemporaneously
with the execution and delivery of this Agreement, Langtry shall deliver to the
Company the consideration contemplated by that certain Purchase and Sale
Agreement by and between the Company and Langtry dated November 24, 2009
in satisfaction of the aggregate Subscription Price; and


 


(b)                                 Certificates
representing the Shares will be issued in the name of Langtry as contemplated
herein.


 


3.                                      Delivery of
Shares.  The delivery of the Shares by
the Company to Langtry shall occur as soon as practicable following the
approval of the Company’s application to list additional shares with respect to
the Conversion Shares on the NYSE Amex LLC and the expiration of any other time
period required by law, at a time and location agreed upon by the Company and
Langtry (the “Final Closing Date”). 
The Company agrees to exercise all commercially reasonable efforts to
cause the Final Closing Date to occur at the earliest practical time, but in no
even later than March 31, 2010.  On
the Final Closing Date, the Company will deliver or cause to be delivered, one
or more physical certificates representing the Shares purchased by Langtry.


 


4.                                      Registration
Rights.


 


(a)                                 Langtry
acknowledges that it is acquiring the Shares for its own account and for the
purpose of investment and not with a view to any distribution or resale thereof
within the meaning of the Securities Act of 1933, as amended, (the “Securities
Act”).  Langtry further agrees that
it will not sell, assign or transfer any Security at any time in violation of
the Securities Act and acknowledges that, in taking unregistered securities, it
must be able to bear the economic risk of its investment for an indefinite period
of time because the Securities have 


 

















 


not
been registered under the Securities Act, and further realizes that none of the
Securities can be sold unless subsequently registered under the Securities Act
or an exemption from such registration is available.  Langtry further recognizes that the Company
is not assuming any obligation to register any security except as expressly set
forth herein.  Langtry also acknowledges
that appropriate legends reflecting the status of the Securities under the
Securities Act may be placed on the face of the certificates for each such
Security at the time of their transfer and delivery to the holder thereof.


 


(b)                                 No Security may
be transferred except in a transaction which is in compliance with the
Securities Act.  Except as provided
hereafter with respect to registration of the Conversion Shares, it shall be a
condition to any such transfer that the Company shall be furnished with an
opinion of counsel to the holder of such Security, reasonably satisfactory to
the Company, to the effect that the proposed transfer would be in compliance
with the Securities Act.


 


(c)                                  Within 60 days
after the written request of Langtry (the “Filing Date”), the Company
shall use its best efforts to prepare and file with the Securities and Exchange
Commission (the “SEC”), one or more registration statements and such
other documents as may be necessary in the opinion of counsel for the Company,
and use its commercially reasonable efforts to have such registration statement
declared effective in order to comply with the provisions of the Securities Act
so as to permit the registered resale of the Conversion Shares, for a period of
five (5) years following the Closing Date. 
The Conversion Shares that are registered for resale under such
registration statement are referred to herein as the “Offering Securities,”
and Langtry, together with its affiliates and transferees, are hereafter
referred to as “Offering Holders.” 
The Company will include in such registration statement (i) the
information required under the Securities Act to be so included concerning the
Offering Holders, as provided by the Offering Holders at the reasonable request
of the Company, including any changes in such information, or information
provided by new Offering Holders, that may be provided by the Offering Holders
in writing to the Company from time to time, and (ii) a section entitled “Plan
of Distribution,” substantially in the form of Exhibit A hereto,
that describes the various procedures that may be used by the Offering Holders
in the sale of Offering Securities; provided, however, that no holder of
Securities (other than Langtry) shall be entitled to have the Conversion
Shares, or the Conversion Shares issuable upon conversion of the Shares, held
by it covered by such registration statement unless such holder agrees in
writing to be bound by all the provisions of this Agreement applicable to a
holder of Offering Securities.


 


(d)                                 Notwithstanding
the foregoing provisions of this Section 4, the Company may voluntarily
suspend the use of any such registration statement for a limited time, if the
Company has been advised in writing by counsel or underwriters to the Company
that the offering of any Offering Securities pursuant to the registration
statement would materially adversely affect, or would be improper in view of
(or improper without disclosure in a prospectus), a proposed financing, a
reorganization, recapitalization, merger, consolidation, or similar transaction
involving the Company.  In addition, the
Company may suspend the use of such registration statement for the 15 calendar
days following the filing of any Form 8-K, Form 10-Q or Form 10-K,
or other comparable form for purposes of filing a post-effective amendment to
the registration statement, to the extent that such filings are not
automatically incorporated by reference into the registration statement, and
until such time as such post-effective amendment is 


 


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declared
effective.  If any event occurs that
would cause any such registration statement to contain a material misstatement
or omission or not to be effective and usable during the period that such
registration statement is required to be effective and usable, subject to the
time periods set forth above, the Company shall promptly file an amendment to
the registration statement and use its commercially reasonable efforts to cause
such amendment to be declared effective as soon as practicable thereafter.  Notwithstanding any provision contained
herein to the contrary, the Company’s obligation to include, or continue to
include, Offering Securities in any such registration statement under this Section 4
shall terminate to the extent such securities are eligible for resale without
limitation on the amount of securities sold under Rule 144(e) promulgated
under the Securities Act.


 


(e)                                  If and whenever
the Company is required by the provisions of this Agreement to use its
commercially reasonable efforts to effect the registration of the Conversion
Shares under the Securities Act for the account of an Offering Holder, the
Company will, as promptly as possible:


 


(i)                                     prepare and
file with the SEC a registration statement with respect to such securities and
use its commercially reasonable efforts to cause such registration statement to
become and remain effective, subject to the Company’s obligations to file
post-effective amendments to such registration statement;


 


(ii)                                  prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective and to comply with the
requirements of the Securities Act and the rules and regulations
promulgated by the SEC thereunder relating to the sale or other disposition of
the securities covered by such registration statement;


 


(iii)                               include in each
such document the names of each Offering Holder who continues to hold
Securities, and the names of any new Offering Holders who have delivered
written notice to the Company at least three business days prior to the filing
thereof that they propose to sell Offering Securities pursuant to the
registration statement as selling securityholders;


 


(iv)                              file pursuant
to Rule 424(b) under the Securities Act an amendment to the
prospectus contained in the registration statement or amend, if required, the
registration statement and prospectus, in each case, to cover new Offering
Holders upon at least seven business days’ prior written notice by such new
Offering Holders to such effect; provided, however, that (A) in no event
shall the Company be required to file pursuant to Rule 424(b) under
the Securities Act a prospectus to cover new Offering Holders other than on the
third Thursday of each calendar month following the calendar month in which the
registration statement is declared effective and (B) in the case where a
post-effective amendment is required, in no event shall the Company be required
to file a post-effective amendment to cover new Offering Holders other than on
the third Thursday of the third full calendar month following the calendar
month in which the registration statement is declared effective and the third
Thursday of each subsequent 


 


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third month thereafter; any delay in
effectiveness as a result of the foregoing shall be excluded from the periods
set forth in subsection (d) above; and


 


(v)                                 furnish to each
Offering Holder such numbers of copies of a prospectus, including a preliminary
prospectus, complying with the requirements of the Securities Act, and such
other documents as such Offering Holder may reasonably request in order to
facilitate the public sale or other disposition of the Offering Securities
owned by such Offering Holder, but such Offering Holder shall not be entitled
to use any selling materials other than a prospectus and such other materials
as may be approved by the Company, which approval will not be unreasonably
withheld, or as may be needed to comply with the requirements of the Securities
Act and the rules and regulations thereunder.


 


(f)                                   Except as
provided below in this Section 4, the expenses incurred by the Company to
comply with this Section 4, including, without limitation, all
registration and filing fees, printing and delivery expenses, accounting fees,
fees and disbursements of counsel to the Company, consultant and expert fees,
premiums for liability insurance, if the Company chooses to obtain such
insurance, obtained in connection with a registration statement filed to effect
such compliance and all expenses, including counsel fees, of complying with any
state securities laws (“State Acts”), shall be paid by the Company.  All fees and disbursements of any counsel,
experts, or consultants employed by any Offering Holder shall be borne by such
Offering Holder.  The Company shall not
be obligated in any way in connection with any registration pursuant to this Section 4
for any selling commissions or discounts payable by any Offering Holder to any
underwriter or broker of securities to be sold by such Offering Holder.  The applicable Offering Holder agrees to pay
all expenses required to be borne by such Offering Holder.


 


(g)                                  In the event of
any registration of Offering Securities pursuant to this Section 4, the
Company will indemnify and hold harmless each Offering Holder, its officers,
directors, investment advisors and each underwriter of such securities, and any
person who controls such Offering Holder or underwriter within the meaning of Section 15
of the Securities Act, against all claims, actions, losses, damages,
liabilities and expenses, joint or several, to which any of such persons may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse such Offering Holder, its
officers, directors and each underwriter of such securities, and each such
controlling person or entity for any legal and any other expenses reasonably
incurred by such Offering Holder, such underwriter, or such controlling person
or entity in connection with investigating or defending any such loss, action,
claim, damage, liability, or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises directly out of or is based primarily upon an untrue
statement or omission made in said registration statement, said preliminary
prospectus or said prospectus, or said amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Offering Holder or such underwriter specifically for use in the preparation
thereof.


 


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(h)                                 At any time
when a prospectus relating to the Offering Securities is required to be
delivered under the Securities Act, the Company will notify the Offering Holder
of the happening of any event, upon the notification or awareness of such event
by an executive officer of the Company, as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing.


 


(i)                                     In the event of
any registration of any Offering Securities under the Securities Act pursuant
to this Section 4, the Offering Holder agrees to indemnify and hold
harmless the Company, its officers, directors and any person who controls the
Company within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages, liabilities, or actions, joint or several, to
which the Company, its officers, directors, or such controlling person or
entity may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities, or actions arise out of or are based
upon any untrue statement of any material fact contained in any registration
statement under which such Offering Securities were registered under the
Securities Act, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent and only to the extent that any such loss, claim, damage,
liability, or action arises out of or is based upon an untrue statement or
omission made in said registration statement, said preliminary prospectus or
said prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such Offering
Holder or any affiliate (as defined in the Securities Act) of such Offering
Holder specifically for use in the preparation thereof.


 


(j)                                    If a claim for
indemnification under Section 4 is unavailable to an indemnified party
because of a failure or refusal of a governmental authority to enforce such
indemnification in accordance with its terms (by reason of public policy or
otherwise), then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and
indemnified party in connection with the actions, statements or omissions that
resulted in such losses as well as any other relevant equitable
considerations.  The relative fault of
such indemnifying party and indemnified party shall be determined by reference
to, among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of
a material fact, has been taken or made by, or relates to information supplied
by, such indemnifying party or indemnified party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission.  The
amount paid or payable by a party as a result of any such contribution shall be
deemed to include any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with the defense of any losses to
the extent such party would have been indemnified for such fees or expenses if
the indemnification provided for under Section 4(g) or 4(i) was
available to such party in accordance with its terms.  Notwithstanding anything to the contrary
contained herein, no Offering Holder shall be liable or required to contribute
under this Section 4(j) for any amount that exceeds the net proceeds
to such Offering Holder as a result of the sale of Conversion Shares pursuant
to the registration statement provided by this Section 4. 


 


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The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4(j) were determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to in this paragraph.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. 
The indemnity and contribution agreements contained in this Section 4
are in addition to any liability that the indemnifying parties may have to the
indemnified parties.


 


(k)                                 Any party
entitled to indemnification hereunder will (i) give prompt written notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties exists with respect to such claim, permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party.  If such defense is
assumed, the indemnifying party will not be subject to any liability for any
settlement made by the indemnified party without its consent (which consent may
not be unreasonably withheld).  An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any indemnified party a
conflict of interest exists between such indemnified party and any other of
such indemnified parties with respect to such claim.


 


(l)                                     With a view to
making available to the Offering Holder the benefits of Rule 144
promulgated under the Securities Act, the Company agrees that it will use its
commercially reasonable efforts to maintain registration of its Common Stock
under Section 12 or 15 of the Securities Exchange Act of 1934, as amended,
(the “Exchange Act”), and to file with the SEC in a timely manner all
reports and other documents required to be filed by an issuer of securities
registered under the Exchange Act so as to maintain the availability of Rule 144.  Upon the request of any record owner, the
Company will deliver to such owner a written statement as to whether it has
complied with the reporting requirements of Rule 144.  At any time when the Company is not subject
to Section 13 or 15(d) of the Exchange Act, the Company will promptly
furnish or cause to be furnished to the Offering Holders, upon request, copies
of the information required to be delivered to holders and prospective
purchasers of the Securities pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of
the Shares.


 


5.                                      Representations
and Warranties of Langtry. 
Langtry hereby represents and warrants to the Company as follows:


 


(a)                                 Langtry is
acquiring the Shares for its own account, for investment and not with a view
to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act, and applicable state securities
laws.


 


(b)                                 Langtry
understands that (i) the Shares and the Conversion Shares (A) have
not been registered under the Securities Act or any state securities laws, (B) will
be issued in reliance upon an exemption from the registration and prospectus delivery
requirements 


 


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of
the Securities Act pursuant to Section 4(2) and/or Regulation D
thereof and (C) will be issued in reliance upon exemptions from the
registration and prospectus delivery requirements of state securities laws
which relate to private offerings, and (ii) Langtry must therefore bear
the economic risk of such investment indefinitely unless a subsequent
disposition thereof is registered under the Securities Act and applicable state
securities laws or is exempt therefrom. 
Langtry further understands that such exemptions depend upon, among
other things, the bona fide nature of the investment intent of Langtry
expressed herein.  Pursuant to the
foregoing, Langtry acknowledges that the certificates representing each of the
Shares and the Conversion Shares shall bear a restrictive legend substantially
as follows:


 


“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT
BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED
OF UNLESS (I) REGISTERED UNDER THE APPLICABLE SECURITIES LAWS OR (II) AN
OPINION OF COUNSEL, WHICH OPINION AND COUNSEL ARE BOTH REASONABLY SATISFACTORY
TO THE COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT
THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”


 


(c)                                  Langtry has
knowledge, skill and experience in financial, business and investment matters
relating to an investment of this type and is capable of evaluating the merits
and risks of such investment and protecting Langtry’s interest in connection
with the acquisition of the Shares. 
Langtry understands that the acquisition of the Shares is a speculative
investment and involves substantial risks and that Langtry could lose Langtry’s
entire investment in the Shares.  Langtry
has retained, at its own expense, and relied upon, appropriate professional
advice regarding the investment, tax and legal merits and consequences of
purchasing and owning the Share.  Langtry
has the ability to bear the economic risks of Langtry’s investment in the
Company, including a complete loss of the investment, and Langtry has no need
for liquidity in such investment.


 


(d)                                 Langtry has
been furnished by the Company all information (or provided access to all
information) regarding the business and financial condition of the Company, its
expected plans for future business activities, the attributes of the Shares and
the Conversion Shares and the merits and risks of an investment in the Shares
which Langtry has requested or otherwise needs to evaluate the investment in
the Company.


 


(e)                                  Langtry is in
receipt of, and its officers have carefully read, the following items:


 


(i)                                     Annual Report
on Form 10-K for the period ended June 30, 2009 filed by the Company
with the SEC;


 


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(ii)                                  Quarterly
Report on Form 10-Q for the period ended September 30, 2009 filed by
the Company with the SEC; and


 


(iii)                               All Current
Reports on Form 8-K filed by the Company with the SEC subsequent to June 30,
2009 (together with the exhibits thereto, collectively, items (i) and
(ii), the “Disclosure Documents”).


 


(f)                                   In making the
proposed investment decision, Langtry is relying solely on investigations made
by Langtry and Langtry’s representatives.


 


(g)                                  Langtry
acknowledges that Langtry has been advised that:


 


(i)                                     The Shares and
the Conversion Shares to be issued to it have not been approved or disapproved
by the SEC or any state securities commission nor has the SEC or any state
securities commission passed upon the accuracy or adequacy of any
representations by the Company.  Any
representation to the contrary is a criminal offense.


 


(ii)                                  In making an
investment decision, Langtry must rely on its own examination of the Company,
including the merits and risks involved in an investment in the Shares and the
Conversion Shares.  The Shares and the
Conversion Shares have not been recommended by any federal or state securities
commission or regulatory authority. 
Furthermore, the foregoing authorities have not confirmed the accuracy
or determined the adequacy of any representation.  Any representation to the contrary is a
criminal offense.


 


(iii)                               The Shares and
the Conversion Shares will be “Restricted Securities” within the meaning of Rule 144
under the Securities Act, are subject to restrictions on transferability and
resale and may not be transferred or resold except as permitted under the
Securities Act and applicable state securities laws, pursuant to registration
or exemption therefrom.  Langtry is aware
that it may be required to bear the financial risks of this investment for an
indefinite period of time.


 


(h)                                 Langtry
acknowledges and is aware that there has never been any representation,
guarantee or warranty made by the Company or any officer, director, employee or
agent or representative of the Company, expressly or by implication, as to (i) the
approximate or exact length of time that Langtry will be required to remain an
owner of the Shares and the Conversion Shares; (ii) the percentage of
profit and/or amount of or type of consideration, profit or loss to be
realized, if any, as a result of this investment; or (iii) that the
limited past performance or experience on the part of the Company, or any
future expectations will in any way indicate the predictable results of the
ownership of the Shares and the Conversion Shares or of the overall financial
performance of the Company.


 


(i)                                     Langtry
represents and warrants that Langtry is an “accredited investor” within the
meaning of Rule 501 of Regulation D under the Securities Act.


 


(j)                                    As of the date
of this Agreement Langtry and its affiliates do not have, and during the 30-day
period prior to the date of this Agreement Langtry and its affiliates have not 


 


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entered
into, any “put equivalent position” as such term is defined in Rule 16a-1
under the Exchange Act or short sale positions with respect to the Common Stock
of the Company.


 


6.                                      Representations
and Warranties of the Company.  The Company hereby represents and warrants to
Langtry as follows:


 


(a)                                 Each of the
Company and its subsidiaries is duly incorporated, validly existing and in good
standing under the laws of its state of incorporation, and is duly qualified to
do business as a foreign corporation in all jurisdictions in which the failure
to be so qualified would materially and adversely affect the business or
financial condition, properties or operations of the Company.  Each of the Company and its subsidiaries has
all requisite corporate power and authority and all material government
licenses, permits and approvals (i) to own and lease the properties and
assets it currently owns and leases and it contemplates owning and leasing and (ii) to
conduct its activities as such activities are currently conducted and as are
currently contemplated to be conducted.


 


(b)                                 The authorized
capital of the Company immediately prior to the Closing will consist of
120,000,000 shares of common stock, par value $0.05 and 10,000,000 shares of
preferred stock, par value $0.01.  The
Certificate of Designation, in the form delivered to Langtry, will be filed
with the Secretary of State of Texas prior to the Final Closing Date.


 


(c)                                  The Company has
duly authorized the issuance and sale of the Shares in accordance with the
terms of this Agreement (as described herein) by all requisite corporate
action, including the authorization of the Company’s Board of Directors of the
issuance and sale of the Shares in accordance herewith.  This Agreement constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies and (iii) to the extent the indemnification provisions
contained herein may be limited by applicable federal or state securities laws.


 


(d)                                 The Shares,
when issued and paid for in accordance with this Agreement, will represent
validly authorized, duly issued and fully paid and nonassessable shares of Preferred
Stock of the Company, and the issuance thereof will not conflict with the
articles of incorporation or bylaws of the Company and, subject to the accuracy
of the representations and warranties of Langtry herein, will be in full
compliance with all federal and state securities laws applicable to such
issuance and sale.


 


(e)                                  The execution
and delivery of this Agreement, the fulfillment of the terms set forth herein
and the consummation of the transactions contemplated hereby will not conflict
with, or constitute a breach of or default under, any agreement, indenture or
instrument by which the Company is bound or any law, administrative rule,
regulation or decree of any court or any governmental body or administrative
agency applicable to the Company.


 


(f)                                   The Disclosure
Documents that have been filed with the SEC, at the time they were filed with
the SEC, each complied in all material respects with the requirements of the 


 


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Exchange
Act, and, when read together, do not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.


 


7.                                      Survival;
Indemnification.  All
representations, warranties and covenants contained in this Agreement and the
indemnification contained in this Section 7 shall survive the
Closing.  Langtry acknowledges the
meaning and legal consequences of the representations, warranties and covenants
in Section 5 hereof and that the Company has relied upon such
representations, warranties and covenants in determining Langtry’s
qualification and suitability to purchase the Shares.  Langtry hereby agrees to indemnify, defend
and hold harmless the Company, its officers, directors, employees, agents and
controlling persons, from and against any and all losses, claims, damages,
liabilities, expenses (including attorneys’ fees and disbursements), judgments
or amounts paid in settlement of actions arising out of or resulting from the
untruth of any representation of Langtry herein or the breach of any warranty
or covenant herein by Langtry. 
Notwithstanding the foregoing, however, no representation, warranty,
covenant or acknowledgment made herein by Langtry shall in any manner be deemed
to constitute a waiver of any rights granted to it under the Securities Act or
state securities laws.


 


8.                                      Notices.  All notices and other communications provided
for herein shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by registered or certified mail, return receipt
requested, postage prepaid:


 


(a)                                 if to the
Company, to the following address:


 


Cubic Energy, Inc.


9870 Plano Road


Dallas, Texas 75238


Attn: Mr. Jon S.
Ross


Telephone: (972) 681-8047


 


(b)                                 if to Langtry,
to the following address:


 


Langtry Mineral &
Development, LLC


9870 Plano Road


Dallas, Texas  75232


Attn:  Calvin A. Wallen, III


Telephone:  972-681-8047


Facsimile:  972-681-9687


 


With a copy (which shall not
constitute notice) to:


 


Barry F. Cannaday


Sonnenschein Nath &
Rosenthal LLP


2000 McKinney Ave., Suite 1900


Dallas, Texas  75201


Telephone:  214-259-1855


 


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Facsimile:  214-259-0910


 


(c)                                  or at such
other address as any party shall have specified by notice in writing to the
others.


 


9.                                      Assignability.  This Agreement is not assignable by Langtry,
and may not be modified, waived or terminated except by an instrument in
writing signed by the party against whom enforcement of such modification,
waiver or termination is sought.


 


10.                               Binding Effect.  Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
permitted assigns, and the agreements, representations, warranties and
acknowledgments contained herein shall be deemed to be made by and be binding
upon such heirs, executors, administrators, successors, legal representatives
and permitted assigns.


 


11.                               Entire
Agreement.  This
Agreement constitutes the entire agreement of Langtry and the Company relating
to the matters contained herein, superseding all prior contracts or agreements,
whether oral or written.


 


12.                               Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without regard to
the principles of conflicts of law thereof that would require the application
of the laws of any jurisdiction other than Texas.


 


13.                               Severability.  If any provision of this Agreement or the
application thereof to Langtry or any circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other subscriptions or circumstances shall not
be affected thereby and shall be enforced to the greatest extent permitted by
law.


 


14.                               Headings.  The headings in this Agreement are inserted
for convenience and identification only and are not intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.


 


15.                               Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which together shall be deemed to be one and the
same agreement.


 


[Signature Page to follow]


 


11

















 


IN
WITNESS WHEREOF, Langtry has executed this Subscription and Common Stock
Purchase Agreement as of the date first set forth above.


 


	
   

  	
  LANGTRY MINERAL &
  DEVELOPMENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Calvin A.
  Wallen, III

  
	
   

  	
   

  	
  Calvin A. Wallen, III

  
	
   

  	
   

  	
  President

  



 


S-1

















 


	
   

  	
  CUBIC ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jon S. Ross

  
	
   

  	
   

  	
  Jon S. Ross

  
	
   

  	
   

  	
  Secretary

  



 


S-2

















 


Exhibit A


 


PLAN OF
DISTRIBUTION


 


As
of the date of this prospectus, we have not been advised by the selling
stockholders as to any plan of distribution. 
Distributions of the shares by the selling stockholders, or by their
partners, pledgees, donees (including charitable organizations), transferees or
other successors in interest, may from time to time be offered for sale either
directly by such individual, or through underwriters, dealers or agents or on
any exchange on which the shares may from time to time be traded, in the
over-the-counter market, or in independently negotiated transactions or
otherwise.  The methods by which the
shares may be sold include:


 


·                  a block trade (which may involve crosses) in
which the broker or dealer so engaged will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;


 


·                  purchases by a
broker or dealer as principal and resale by such broker or dealer for its own
account pursuant to this prospectus;


 


·                  exchange
distributions and/or secondary distributions;


 


·                  sales in the
over-the-counter market;


 


·                  underwritten
transactions;


 


·                  ordinary
brokerage transactions and transactions in which the broker solicits
purchasers; and


 


·                  privately
negotiated transactions.


 


Such
transactions may be effected by the selling stockholders at market prices
prevailing at the time of sale or at negotiated prices.  The selling stockholders may effect such
transactions by selling the Common Stock to underwriters or to or through
broker-dealers, and such underwriters or broker-dealers may receive
compensations in the form of discounts or commissions from the selling
stockholders and may receive commissions from the purchasers of the Common
Stock for whom they may act as agent. 
The selling stockholders may agree to indemnify any underwriter,
broker-dealer or agent that participates in transactions involving sales of the
shares against certain liabilities, including liabilities arising under the
Securities Act.  We have agreed to
register the shares for sale under the Securities Act and to indemnify the
selling stockholders and each person who participates as an underwriter in the
offering of the shares against certain civil liabilities, including certain
liabilities under the Securities Act.


 


In
connection with sales of the Common Stock under this prospectus, the selling
stockholders may enter into hedging transactions with broker-dealers, who may
in turn engage in short sales of the Common Stock in the course of hedging the
positions they assume.  The selling
stockholders also may sell shares of Common Stock short and deliver them to
close out the short 


 


A-1

















 


positions, or loan or pledge the shares of Common Stock to
broker-dealers that in turn may sell them.


 


The
selling stockholders and any underwriters, dealers or agents that participate
in distribution of the shares may be deemed to be underwriters, and any profit
on sale of the shares by them and any discounts, commissions or concessions
received by any underwriter, dealer or agent may be deemed to be underwriting
discounts and commissions under the Securities Act.


 


There
can be no assurances that the selling stockholders will sell any or all of the
shares offered under this prospectus.


 


A-2